The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.

1027 GMT - Shell's preference for share buybacks over dividends will remain a significant topic of discussion if it fails to lead to a re-rating of its shares, Jefferies analysts Giacomo Romeo and Kai Ye Loh write. The London-listed energy company increased its shareholder payout target to 40%-50% of cash flow from operations and management said it would favor buybacks over dividends. Management also said the market undervalues the shares. Dividends will continue to grow at 4% a year but a one-off increase in 2025 or 2026 shouldn't be ruled out, the analysts write. Shares trade 1.45% higher at 2,805.00 pence. (adam.whittaker@wsj.com)

1024 GMT - Palm oil ended higher amid positive sentiment. Investor sentiment was supported by expectations of a narrowed scope for U.S. tariffs, while the appeal of Malaysian stocks as a safer alternative is likely to provide further upside, says Kenanga Futures in a commentary. From a technical perspective, crude palm oil futures have been trading within a range of 4,200 to 4,700 ringgit a ton since mid-December 2024, Phillip Nova analyst Lim Tai An says in a commentary. Resistance is seen around the 4,330 ringgit level, while support is anticipated near 4,200 ringgit a ton, the analyst says. The Bursa Malaysia derivatives contract for June delivery was 14 ringgit higher at 4,259 ringgit a ton. (tracy.qu@wsj.com)

1008 GMT - European natural-gas prices slide in early trade as talks over a cease-fire in the Black Sea weigh on sentiment, with the benchmark Dutch TTF down 1.3% to 41 euros a megawatt hour. Any progress toward a resolution to end the war in Ukraine raises hopes for the resumption of some Russian gas flows to Europe at a time when inventory levels are low, putting pressure on prices. According to industry group Gas Infrastructure Europe, EU storage is only 33.9% full. However, "buyers in Europe remain skeptical they will see any meaningful increase in supplies from Russia," analysts at ANZ Research say. "Moreover, there is growing concern that the EU's upcoming ban on the transhipment of Russian LNG at EU ports will disrupt winter deliveries from Russia's Yamal LNG terminal." (giulia.petroni@wsj.com)

0947 GMT - EnBW's Chief Executive Officer Georg Stamatelopoulos says transforming Germany's energy system would only work if is designed to match demand and implemented effectively. Stamatelopoulos says new gas-fired power plants are urgently needed and called on the new German administration to deliver clarity on the Power Plant Security Act soon. The act would ensure gas-power plants can be built in the country to replace coal power plants currently being phased out. The CEO calls for adjustments to Germany's energy policy and says that stable legal and regulatory frameworks will be crucial to delivering the certainty needed to invest in the system. Shares trade down 0.9% at 68.20 euros. (adam.whittaker@wsj.com)

0937 GMT - Compensation cuts from OPEC+ members exceeding oil output quotas aren't expected to outweigh the group's planned production increase, according to BNP Paribas. While full compliance with the cuts could theoretically more than offset the returning flows starting in April, analysts at the bank remain cautious about adherence. "We note Kazakhstan's ramp-up in production from the Tengiz field and Iraq's stated intention to resume flows from Kurdistan through the Ceyhan pipeline." Meanwhile, OPEC+ could also decide to boost output further if compliance rates exceed expectations, they say. U.S. pressure on Iran and Venezuela is instead expected to limit the impact of OPEC+'s output increase, with Iranian exports expected to fall by 600,000 barrels a day and Venezuelan exports by 72,000 barrels a day in 2025. BNP forecasts Brent crude at an average of $73 a barrel this year. (giulia.petroni@wsj.com)

0919 GMT - OPEC+'s spare capacity and readiness to increase oil output help mitigate some risks associated with U.S. efforts to curb Iranian and Venezuelan crude exports, according to Capital Economics' Kieran Tompkins. "These dual campaigns on Iran and Venezuela could amount to a sizeable reduction in global oil supply," the senior economist says, adding that the market could lose up to 1.5 million barrels a day. However, "the complexion of these upside risks to oil prices would look very different if OPEC+ weren't sitting on around 6 million bpd of spare capacity." Any upward pressure on oil prices due to U.S. actions against Iran and Venezuela is expected to fade quickly, Tompkins says, with Brent crude still projected to average $70 a barrel this year. (giulia.petroni@wsj.com)

0857 GMT - Oil prices edge higher in early trade, supported by market concerns over global supplies after the U.S. stepped up efforts to limit Iranian and Venezuelan crude sales. Brent and WTI both rise 0.5% to $72.74 and $69.36 a barrel, respectively. Futures are also boosted by bullish U.S. stockpiles figures from the American Petroleum Institute, which point to inventory draws across the board last week. Meanwhile, traders are keeping a close eye on U.S.-Russia negotiations, with Moscow saying it would comply with a Black Sea cease-fire upon the lifting of some banking sanctions. However, the impact of any agreement on the physical oil market is expected to be relatively minor, analysts say, given that Russia diverted oil flows to other markets following Western sanctions. (giulia.petroni@wsj.com)

0842 GMT - The centerpiece of Shell's updated strategy remains its plan to grow free cash flow a share by 10% a year through 2030, Berenberg analysts write. Buybacks are central to this target and Shell's executives gave extended visibility on their plans, the analysts write. Shell also increased the shareholder payout ratio to between 40% and 50% of cash flow from operations over the cycle. Its current quarterly buyback of $3.5 billion is equivalent to 7% of its market cap annually, the analysts add. Shares trade up 0.6% at 2,782.00 pence. (adam.whittaker@wsj.com)

0832 GMT - Singapore's March industrial production is likely to rebound into positive territory from a low base last year, following an unexpected contraction in February, says OCBC's Selena Ling in a note. Industrial production fell 1.3% on year last month, marking the weakest pace since June 2024, she notes. However, in the first two months of this year, industrial output rose 3.5%, which is still an improvement from an expansion of 3.1% for the same period last year, she says. Given the fluidity of the situation on tariffs, and the fact that the Asean region isn't the initial target for U.S. tariffs yet, OCBC maintains its Singapore 2025 industrial output growth forecast of 2.7%.(amanda.lee@wsj.com)

0710 GMT - TotalEnergies is set to outperform its European rivals and the market underestimates the strength of its upstream business, Citi analysts write. The analysts expect 6% a year real growth in cash flow from operations (CFFO) through 2030--a figure well above those of key European peers and even on-par or slightly ahead of U.S. integrated oil companies, they write. Investors underappreciate the volume and margin growth across its upstream division, and the analysts forecast for CFFO from 2028 through 2030 to be 11% above a VisibleAlpha consensus. The analysts upgrade the stock rating to buy from neutral and raise share price target to 70 euros from 61 euros. Shares closed Tuesday at 59.35 euros. (adam.whittaker@wsj.com)

0630 GMT - LG Energy Solution's 2Q revenue is expected to grow on year thanks to a recovery in demand for electric-vehicle batteries, NH Investment & Securities analyst Ju Min-woo writes in a note. The South Korean battery maker is projected to post 5% on-year revenue growth for the April-June period, following 1Q's estimated 2% contraction, Ju says. LG is likely to gain from restocking demand from European carmakers seeking to meet rules on reducing automotive carbon-dioxide emissions and General Motors having set an ambitious EV sales goal, he adds. NH raises the stock's target to KRW450,000 from KRW440,000 and keeps a buy rating. Shares are 6.4% higher at KRW357,000. (kwanwoo.jun@wsj.com)

(END) Dow Jones Newswires

March 26, 2025 06:27 ET (10:27 GMT)

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